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Viewpoint: The Marriage of Blockchain and HR

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.

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​Lately there has been a tremendous amount of press about and research conducted on the utility of blockchain. The topic can be incredibly complicated, but blockchain could be a promising update in human resources technology.

What Is Blockchain?

Blockchain creates records that are decentralized, fixed and transparent:

Decentralized. Blockchain records are copied and stored across millions of computers and can be open to the public. This means that no one firm owns access to the data.

Fixed. The records and transactions cannot be changed, and the records are permanent.

Transparent. The records are public and can be compared across the millions of copies.

These concepts are what underlie cryptocurrency, blockchain's initial foray into the public eye. But as companies start to explore blockchain for commercial use, the varying solutions don't always follow all three concepts.

Another core element to blockchain is the system's use of cryptography to convert information into strings of data. For instance, my role of vice president, solution provider programs at Bersin, Deloitte Consulting LLP, gets converted into a 64-character line of numbers and lowercase letters in seemingly random order. While the data is public, it is not decipherable.

What Are the Business Applications?

Perhaps the best-known application of blockchain is when transactions occur, as blockchain enables two parties to update a record (e.g., when a passenger of a ride-hailing service sends money to a driver), and those transactions happen for free. As a result, many firms are looking at business-to-consumer transactions, such as health care and credit card payments, as potential applications of the technology. In business-to-business transactions, companies are trying blockchain technology on supply chain management, accounting and legal contracting.

HR and employees maintain many different types of records, such as resume data, performance records, safety records and compensation details. As a result, there are many scenarios in which HR technology providers could integrate blockchain into their products.

Recruiters can use the technology to verify a job candidate's credentials, such as work experience, education or software certifications. Some HR companies are looking to use blockchain to communicate background-check dispositions. An organization's system could create a "self-sovereign identity" concept, enabling people to completely control data about themselves. This would reduce the opportunities for third-party organizations to provide incorrect or false data about a job candidate or employee.

These examples just skim the surface of blockchain's HR capabilities, but it is important to note that many providers that would use blockchain to develop HR technology would still charge a fee to earn revenue. As a result, I expect many HR technology companies to explore using blockchain as a technology enabler to help reduce cost and drive value for HR buyers.

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.